Boeing Reports $280 Million Charge on Air Force One Programme

By the Editorial Team · Wednesday, July 29, 2026

Boeing posted a $428 million net loss in the second quarter, mainly due to higher engineering costs and delays in its Air Force One replacement program and increased expenses from ramping up 737 MAX production. Despite the loss, the company improved its free cash flow to $631 million and raised production targets to address a large order backlog, signaling progress toward profitability and operational recovery.

Boeing reported a second-quarter net loss of $428 million, reflecting ongoing challenges related to the company’s Air Force One replacement programme and efforts to increase commercial aircraft production. The loss, announced on Tuesday, included a $280 million charge tied to higher engineering costs for the delayed 747-8 jets designated to serve as Air Force One, a project now four years behind schedule and over $1 billion above its original budget.

The Air Force One contract, signed in 2018 for $3.9 billion, involves delivering two modified 747-8 aircraft by 2028. To maintain security and performance standards, Boeing has accelerated work on the planes, resulting in increased development expenses. In the meantime, a Qatari-donated 747-8 jet has been used as an interim Air Force One vehicle, though concerns over its security features have prompted plans for further upgrades.

Despite the net loss, Boeing generated $631 million in free cash flow during the quarter, a significant improvement from a negative $200 million in the same period last year. The company attributed the stronger cash flow partly to higher-than-expected customer payments. Boeing also reaffirmed its guidance for a full-year free cash flow between $1 billion and $3 billion, which would mark a return to positive cash flow since 2023.

Boeing’s commercial airplane division continued to face operational losses due to the costs incurred while ramping up manufacturing to address a multibillion-dollar backlog of undelivered planes. The company recently inaugurated a new production line in Everett, Washington, to boost output of its 737 MAX jets, increasing the monthly production target from 42 to 47 units. This expansion is designed to improve profitability through greater economies of scale.

Sales for the quarter rose 8% compared to the previous year, reflecting steady demand, although earnings fell short of Wall Street expectations. Boeing also increased capital investments, particularly to enhance 787 production capacity in South Carolina and military jet manufacturing near St. Louis, Missouri.

Chief Executive Kelly Ortberg emphasized progress amid the challenges, noting in a company memo that sustained focus on safety, quality, and timely delivery would support improved competitiveness and set the stage for a stronger second half of the year. Boeing's shares responded positively to the results, rising more than 5% in midday trading on the New York Stock Exchange.

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